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Tax Practices of Apple and Other Major Technology Firms Overseas Cause Senate to Investigate

The United States Senate is investigating Apple for allegedly negotiating a "special tax deal" with the government of Ireland as part of its effort to keep its massive cash hoard (currently valued at over $145 billion) overseas. In fact, Apple has chosen to take out loans to pay for its dividends and other expansions rather than repatriate some of the cash it has stockpiled. But the scrutiny is not limited to just Apple, and it's not limited to just the United States either.

Other tech industry giants, such as Google and Amazon, and even coffee powerhouse Starbucks have come under attack in the United Kingdom and Europe for the relatively lower taxes they pay in those territories. The UK government alleges that Google and Apple have not been paying their fair share of taxes and the public seems to agree. The problem is that little to no change has occurred, anywhere.

Tax laws are largely a domestic affair. International taxation laws are hard to agree upon because each country wants to have the most advantageous business climate possible to attract businesses. If one country taxes a business at 25% while another will only tax at 15%, businesses will usually go for the lower tax. Since it's not to the advantage of a country to necessarily work with other countries on tax laws, it's little surprise that when the United Kingdom wants an international resolution, very little has been actually resolved.

Ireland has adamantly rejected that any such "special tax deal" for Apple exists. Starbucks has taken the unusual step of promising to pay an extra $15 million in taxes in the UK over the next couple of years, and Google has passed the buck to the governments to change the tax laws. One thing, however, remains certain: so long as iPhones that can Google a specific Kindle book on Amazon while the user drinks his or her Starbucks coffee continues to be popular, these tax issues are not going to go away. 

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